Answer: ending inventory less beginning inventory.

## Explanation To estimate a company's purchases, we use the basic inventory equation: **Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory** Rearranging this equation to solve for Purchases: **Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory** Therefore, purchases can be estimated as: - **Cost of sales** (Cost of Goods Sold) **plus** - **Ending inventory less beginning inventory** This matches option A. ### Why the other options are incorrect: **Option B (beginning inventory less ending inventory):** This would give you a negative number if ending inventory is greater than beginning inventory, which doesn't make sense for purchases. **Option C (the average level of inventory for the period):** While average inventory is useful for calculating inventory turnover ratios, it doesn't directly relate to the calculation of purchases in the inventory equation. ### Key Concept: This question tests understanding of the inventory equation and how to derive purchases from the basic accounting relationship between beginning inventory, purchases, cost of goods sold, and ending inventory.

Author: LeetQuiz .